Financial Highlights

Constellation Financial Highlights: 2017

Bill McDonough, President and CEO, Constellation

Constellation, Inc., the largest medical professional liability organization in the Midwest and Mountain States, completed 2017 in a strong financial position. For the year, we reported increased members’ surplus, strong net income and outstanding customer retention.

Our ongoing financial strength enables us to deliver superior service to the policyholders of our member companies while also investing in opportunities to drive future growth. Our solid financial position fuels our mission to help physicians and all those who devote their lives to health care attain their dream – to help, heal and serve.

“A”-rated

A.M. Best, the industry’s leading rating agency, affirmed the financial strength and stability of our member insurance companies with an “A” (Excellent”) credit rating after reviewing our 2017 financial results. Our “A” (“Excellent”) rated member insurance companies are MMIC, Constellation’s founding member company, which has a leadership position in the Midwest; UMIA, the leading professional liability insurance provider in the Mountain States; and Arkansas Mutual Insurance Company, which serves physicians in Arkansas.

Increased members’ surplus

For 2017, members’ surplus, an indicator of financial strength and stability, totaled $389.1 million, up 12.3 percent over 2016. These funds enable us to honor our commitments and to invest in new avenues to increase value for our policyholders.

Strong net income despite market pressures

For the past several years, increased consolidation and competition in the health care industry, along with downward pressure on premiums resulting from high levels of available capital held by medical professional liability insurance companies, have contributed to a challenging market. In 2017, net premiums earned were $135.3 million, down from $140.0 million in 2016. Despite the competitive market pressures, Constellation reported strong net income for the year of $43.1 million helped in part by favorable investment performance.

Outstanding customer retention

Nearly 97 percent of Constellation’s insurance clients chose to continue their policies with one of our companies rather than switch to a competitor in 2017. We take pride in the trust our clients place in us – and are committed to providing personalized service and innovative offerings that will continue to earn their business.

A partnership strategy to drive growth and extend service

In 2017, Constellation marked its seventh year as a mutual holding company. The strategy behind Constellation’s formation – to bring together strong partners to achieve mutual and collective success – continues to drive our momentum, enabling us to better serve our customers, achieve operating efficiencies and invest in innovative, differentiating solutions. Our focus remains on physicians and other care providers – on supporting them as they work to improve patient care and patient experience, reduce costs and contribute to the sustainable growth of their organizations. We are grateful for the opportunity to serve our valued clients and the broader health care community – and to support the vital work they do to help, heal and serve.